Dividend Investing Performance + Safety

Safety Income Growth Goals

Dividends Facts ……. not projections Bias towards increase Cash every 90 days Fuel the engine of compounding Dividends

Dividends drive returns across market cycles Power of dividends and dividend reinvestment: Growth of $10,000 (12/1960 to 12/2012) Dividends drive returns across market cycles S&P 500 Total Return (Reinvesting dividends) • Ending value: $1,241,459 • Total return: 9.72% annualized 79.5% of the S&P 500 total return can be attributed to dividends and dividend reinvestment over the past 50 years S&P 500 Total Return (No dividends) • Ending value: $245,426 • Total return: 6.35% annualized Source: Morningstar (Dec. 2012) Source: Morningstar (Dec. 2012)

Dividend payers: Higher returns, less volatility S&P 500 Risk vs. return profile by dividend policy: Jan. 1972 to Dec. 20121 Dividend payers: Higher returns, less volatility Dividend Payers : Total return = 8.74% Std. Deviation = 17.03% β = 0.93 Dividend Payers vs. Non-Payers: Higher average annual returns Lower annual standard deviations Lower betas Dividend Non-Payers : Total return = 1.61% Std. Deviation = 25.55% β = 1.30 1 Ned Davis Research (Dec. 2012)

Dividend Sector Focus Utilities + REITs Sector knowledge Essential services High dividends Dividend Sector Focus

Utilities Sector Characteristics Legal and natural monopolies Rate-of-return model designed for profit Demand assured Limited competition Financial + technological change Rate is slow Companies are adaptable Utilities Sector Characteristics

Company Characteristics Higher dividends Lower payout ratios Less leverage Efficient asset utilization Strong or growing market Strong management teams Company Characteristics

Equity Characteristics Market 80+ companies; $700+ billion market cap Volatility lower volatility; lower drawdowns Bear markets fewer, quicker recoveries Diversification low correlation with S&P 500 (42% 2000-2015); dampens investment portfolio volatility Equity Characteristics

Investment Process Fundamental research Relative value rankings Portfolio construction Active management Risk management Investment Process

Fundamental Research SEC filings Data feeds Industry data Company specific internal research Regulatory news Weekly meetings Fundamental Research

Relative Value Rankings With quality as a bias, we maintain a forced disciplined valuation approach Ran back-tests weekly from 1987 to 9/2013 9 month development period 100+ million data points Capture/quantify key drivers of value Consistent relative value rankings BUYs = top 25% HOLDs = middle 50% SELLs = bottom 25% Results BUYs outperform HOLDs and HOLDs outperform SELLs Relative Value Rankings

Portfolio Construction Positions 20, approximately Holding period considered Long only no short positions Leverage none Max. position 7% approximately Turnover 25% approximately Portfolio Construction

Active Management Daily monitoring Track company weights Adapt to significant changes in facts Active Management

Risk Management Monitoring Universe selection Exposure limits US Utilities sector companies as classified by the Global Industry Classification Standard (GICS) Prevents style drift Exposure limits Holdings ~20 Position limit ~7% Sub-sector diversification Monitoring 5% targeted tracking error to MSCI US IMI Utilities 25/50 Index Daily monitoring (e.g., portfolio weights, company developments) Bi-weekly revaluations (or more frequently with significant changes) Performance and risk measures, as needed Risk Management

Performance Dividend Advisors U.S. Utilities Strategy: Growth of $100,000 (9/13/2013 to 6/30/2016) Performance U.S. Utilities Strategy Return: $177,049 Cumulative total return (net): 77.05% Annualized total return (net): 22.06% As of June 30, 2016 Past performance is no guarantee of future results. Net returns are presented net of expenses, including a 0.90% management fee, and include the reinvestment of all income.

Performance Dividend Advisors U.S. Utilities Strategy Year to Date Since inception (9/13/2016) As of June 30, 2016 Past performance is no guarantee of future results. Net returns are presented net of expenses, including a 0.90% management fee, and include the reinvestment of all income. Returns greater than one year are annualized. Investors cannot invest directly in an index.

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Important Information No offer or solicitation. The information in this document is for informational purposes only and is not an offer to sell or the solicitation of any offer to buy securities. The only purpose of this document is to provide information regarding Dividend Advisors and Dividend Advisors' US Utilities Strategy (the "Strategy"). A prospective investor also must review Dividend Advisors' Form ADV for additional details and conflicts of interest, which will be available on request. Risks. An investment in the Strategy involves risks. Only by reading those offering materials carefully and discussing any questions you may have with Dividend Advisors can you determine whether the investment's risks and conflicts of interest are acceptable to you. No duty to update. Neither Dividend Advisors nor any of its affiliates assumes any duty to update any information in this presentation for subsequent changes of any kind. For example, the investment objectives, methods and limitations summarized herein represent Dividend Advisors' current intentions. Nevertheless, depending on conditions and trends in securities markets and the economy generally, Dividend Advisors' may pursue any objectives, employ any techniques or purchase any type of security that it considers appropriate and in the best interests of its clients. Forward looking statements. This document may contain forward-looking statements based on Dividend Advisors' expectations and projections about the methods by which it expects to invest. Those statements are sometimes indicated by words such as "expects," "believes," "will" and similar expressions. In addition, any statements that refer to expectations, projections or characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Such statements are not guaranties of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual returns could differ materially and adversely from those expressed or implied in any forward-looking statements as a result of various factors. Preparation of document. Dividend Advisors' prepared this document. The information in this document has not been reviewed or audited by an independent accountant or other independent testing firm. Dividend Advisors' believes the data is correct but does not assume any liability if such data is incorrect. Indexes. Indexes are unmanaged and investors cannot invest directly in an index. The performance of indexes do not account for any fees, commissions or other expenses that would be incurred. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market value weighted index with each stock's weight in the index proportionate to its market value. Total return reflects the effects of dividend reinvestment. The Barclays U.S. Aggregate Bond Index provides a measure of the performance of the U.S. investment grade bonds market, which includes investment grade U.S. Government bonds, investment grade corporate bonds, mortgage pass-through securities and asset-backed securities that are publicly offered for sale in the United States. The securities in the Index must have at least 1 year remaining to maturity. In addition, the securities must be denominated in US dollars and must be fixed rate, nonconvertible, and taxable. Price/Earnings Ratio (P/E Ratio). A valuation ratio of a company's current share price compared to its per-share earnings. Price/Book Ratio (P/B Ratio). A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. Dividend Yield (TTM). The percentage income a portfolio returns over the past 12 months. It is calculated by taking the weighted average of the yields of the stocks and funds that compose the portfolio. Important Information